Project to demonstrate feasibility of gas production with sensitivities on production schemes on Sterling B4 sands formation

Abstract

The Sterling B4 reservoir is a low-relief anticline structure underlain by a weak aquifer located on the Kenai Peninsula of Alaska. This dry gas-on-water reservoir, holding approximately 13.9 BCF, has experienced challenges since its first development in the 1960s. The gas-water contact is very mobile and easily influenced upward by gas production. All four wells, largely producing in succession of one another, have experienced excessive water production which killed gas production. Faulty drilling and completion work exacerbated the challenges associated with bringing the gas to market. This project covers an effort to develop the Sterling B4 and determine feasible alternatives for commercialization. Those alternatives include infill drilling, variable production, and co-production. Co-production is a method by which gas is produced from a single upper perforation and water is produced from a lower perforation; each of the streams are produced independently by mechanical means which utilize packers and tubing. The only feasible alternative found by this study is co-production. Of the two coproduction methods analyzed, the highest ultimate recovery includes the utilization of an existing vertical well perforating the upper portion of the reservoir for gas production and a new lower horizontal well perforating the water zone to control the gas-water contact. Modeled production schemes proved the gas-water contact was able to be controlled from upward mobility by maintaining a threshold pressure delta between the bottom-hole pressures of the two producing wells. Utilizing co-production in this manner yielded incremental benefit of over 2 BCF until shut-in limits were triggered. Economic analysis of the project has proved bringing the gas to sales presents a significant prize able to support production and able to support facility operational expense despite no other revenue streams. Should other nearby formations demonstrate sufficient targets the economic case would be enhanced and present an even greater prize.